Robbins LLP reminds investors that a shareholder filed a class action on behalf of persons and entities that purchased or otherwise acquired Li Auto Inc. (NASDAQ: LI) securities between February 26, 2024 and March 20, 2024. Li Auto operates in the energy vehicle market in the People’s Republic of China and designs, develops, manufactures, and sells smart electric vehicles.
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The Allegations: Robbins LLP is Investigating Allegations that Li Auto Inc. (LI) Misled Investors Regarding its Business Prospects
According to the complaint, during the class period, defendants failed to disclose to investors that: (i) Li Auto had overstated the demand for its vehicles and the efficacy of its operating strategy in launching the Li MEGA; (ii) accordingly, the Company was unlikely to meet its Q1 2024 vehicle deliveries estimate; and (iii) the foregoing, once revealed, was likely to have a material negative impact on the Company’s financial condition.
The complaint alleges that on March 31, 2024, Li Auto issued a press release disclosing that, “[d]ue to lower-than-expected order intake, the Company now expects its vehicle deliveries for the first quarter of 2024 to be between 76,000 and 78,000 vehicles, revised from the previous vehicle delivery outlook of between 100,000 and 103,000 vehicles.” In addition, the Company stated that the Li MEGA had an operating strategy that was “mis-paced,” noting that operations were planned as if the model had already entered the “scaling phase” of sales—that is, the phase focusing mainly on customer acquisition, team building, and operational efficiency for sustainable growth—while it was still in the early “validation” period, during which the Company would focus on creating a product market fit by idea validation and product refinement. Further, the Company stated that it will revert to the validation phase of sales by shifting its focus toward its core user group, target sales to cities with stronger purchasing power, and then will look to expand to a broader user base.
On this news, Li Auto’s American Depositary Share (“ADS”) price fell $2.55 per ADS, or 7.48%, to close at $31.53 per ADS on March 21, 2024.
What Now: You may be eligible to participate in the class action against Li Auto Inc. Shareholders who want to serve as lead plaintiff for the class must file their motions with the court by July 9, 2024. A lead plaintiff is a representative party who acts on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member. For more information, click here.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
About Robbins LLP: Some law firms issuing releases about this matter do not actually litigate securities class actions; Robbins LLP does. A recognized leader in shareholder rights litigation, the attorneys and staff of Robbins LLP have been dedicated to helping shareholders recover losses, improve corporate governance structures, and hold company executives accountable for their wrongdoing since 2002. Since our inception, we have obtained over $1 billion for shareholders.
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